EUR/GBP Scales Through 0.7900 Handle, Eyeing 0.7925 Resistance
pair maintained its bid tone on disappointment from UK industrial
production data and has now moved past 0.7900 handle to currently trade
near day's peak at 0.7907.
The relative under-performance by the British Pound is on the back of softer-than-expected UK manufacturing & industrial production data. Adding to the recent slew of disappointing PMI readings, UK manufacturing and industrial production data for March pointed to a subdued growth picture by printing +0.1% & +0.3% m/m rise, respectively. Consensus estimates were expecting the data to come-in at +0.4% and 0.5%, respectively.
Even during recent trading sessions, the pair's rebound from 20-day SMA were strong enough to lift the pair beyond 0.7900 handle, but the pair has failed to sustain any subsequent strength beyond 0.7925 resistance. Hence, it would be prudent to wait for a decisive break out of the current trading range.
Technical levels to watch
From current levels the pair could make a fresh attempt to retest 0.7925 resistance, which is closely followed by resistance near 0.7947-50 area, marking 2-week high. Only a sustained strength above 0.7925 would pave way for further near-term appreciating move for the pair towards reclaiming the very important 0.8000 psychological mark resistance.
On the flip side, reversal from current levels might continue to find strong support at 20-day SMA region, near 0.7865 level. A convincing break below 20-day SMA strong support would increase the pair's vulnerability to extend its near-term corrective move, initially towards 0.7825 intermediate horizontal support and eventually towards its next major support near 0.7785 level.